This blog is written weekly by Dock David Treece, a registered investment advisor with Treece Investment Advisory Corp. It is meant to share insight of investment professionals, including Dock David and his father, Dock, and brother, Ben, with the public at large. The hope is that the knowledge shared will help individuals to better navigate the investment world.

Sunday, February 22, 2009

Revisit your retirement plan

In today’s changing investment climate, it is well worth many investors’ time to learn about their retirement plans. Whether they contribute to an IRA or have an employer-sponsored plan (i.e.: 401(k)), investors ought to learn their respective rules and features. While IRA’s, being individually established and self-directed, are much less restrictive, many of these rules apply more for 401(k)’s, but are worthwhile for everyone to consider. First and foremost in any retirement plan, investors should learn about their investment options. Many company-sponsored plans have a limited list of investment options from which employees can choose, while others are more open-ended. And while some plans are quite restrictive in their investment options, they also have provisions allowing the employee to rollover their 401(k) into an IRA, which has many more options. All these rules are worth the little time it takes to study them.

Even more importantly in today’s economic environment, investors need to change the way they look at their retirement accounts. With social security under-funded and quickly falling out of favor, Americans need to look at their own savings as their primary retirement fund. As such, retirement accounts need attention, more than they used to. We are entering a period where there is good money to be made; but, unlike previous years, only in select investments. Here are a few steps readers can follow to prepare themselves:

Adjust your investment horizon to fit your profile. If you’re 30 years old, recognize that you probably aren’t going to retire anytime soon (Mega Millions aside). Invest with this timeline in mind, recognizing that you have decades to recoup recent losses. This brings up an important note: This doesn’t mean that you can simply buy into an investment and forget about it, just adopt the right mindset.

Develop an investment strategy and stick to it; don’t be discouraged by the day-to-day fluctuations of the market. Decide what level of contributions you are comfortable with and what investments allow you to sleep at night.

Don’t stop contributing to your retirement plan unless cash flow is a serious issue. With deep discounts to be found in stocks and corporate debt, it is extremely expensive to let fear get the better of you. Look at investment opportunities objectively to judge what looks good fundamentally but may have been sold down with the rest of the market.

For those with employer-sponsored retirement plans, here is perhaps the most important piece of advice we can offer: Find out whether your plan provides you with an advisor you can talk to. They should be able to teach you a lot of the ins and outs of your retirement plan, as well as discuss investment options. If an advisor isn’t made available to you and you don’t feel comfortable researching these issues yourself, please seek one out. Find an advisor that doesn’t charge for time (ask their secretary if you’re not sure) and get professional opinions on what you can do to be best-prepared for your retirement.

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Dock David Treece is a stockbroker licensed with FINRA. He works for Treece Financial Services Corp.(http://www.TreeceInvestments.com/) and also serves as editor of the financial news site GreenFaucet.com and as a business commentator for the Toledo Free Press.

While Dock David's typical content includes commentary on recent economic or political events and trends within the global financial markets, those pieces in the "Dollars & Cents" category have been developed for the Toledo Free Press STAR edition for younger investors.

The information contained in these posts is the express opinion of Dock David Treece and should not be used without outside verification, it should not be construed as investment advice.

About "Dock2"

Dock David Treece is a registered securities representative with FINRA, a registered investment advisor, a registered securities principal, and a financial operations principal. He works with Treece Financial Services Corp and Treece Investment Advisory Corp.

"Dock2" graduated from the University of Miami (FL) with a Bachelor's of Business Administration and a focus in Finance. He has worked in the investment business under the tutelage of his father since an early age, and also worked for several other financial firms including Franklin Templeton Investments and John Hancock Financial Network.